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Early yesterday morning bitcoins blockchain forked meaning a separate cryptocurrency was created called bitcoin cash.

The way a fork works is instead of creating a totally new cryptocurrency (and blockchain) starting at block 0, a fork just creates a duplicate version that shares the same history. So all past transactions on bitcoin cashs new blockchain are identical to bitcoin cores blockchain, with future transactions and balances being totally independent from each other.

For practical matters, all this really means is that everyone who owned bitcoin before the fork now has an identical amount of bitcoin cash that is recorded in bitcoin cashs forked blockchain.

But its not exactly this easy. If you control your own private keys, or hold your bitcoin in an exchange that said it would credit users balances with bitcoin cash, youre fine and can access your newfound cryptocurrency right now.

If you held your bitcoin with a provider like Coinbase, which said before the fork they arent planning on distributing bitcoin cash to users or even interacting with the new blockchain at all, then you may be out of luck.

To be clear this doesnt mean companies like Coinbase and Gemini are taking your bitcoin cash for themselves. Its just that they think its a distraction and not really going to be worth anything in the long run. If this proves to be false and the coins hold value, these companies will most likely end up distributing them to users.

If you know anything about cryptocurrencies you know there are a ton of them. Like thousands of them. Some are legitimate and substantially different (arguably better) than bitcoin, and some are pretty much just copycats trying to make a quick buck.

Bitcoin cash is just another modified cryptocurrency.

But its getting more attention right now for a few reasons:

First, it was created as a result of forking bitcoin core, and not created from scratch. But this isnt new other cryptocurrencies have also forked from bitcoinin the past, and are nowhere near as valuable as bitcoin cash currently is. That being said, it does mean that anyone who held bitcoin before yesterday now potentially has access to an equal amount of bitcoin cash, which is giving it a lot of attention, as people are saying its free money.

Secondly, its getting attention because the hard fork was timed to coincide with bitcoin core activating a change in its code called BIP 148, which was a highly publicized event in itself. This Bitcoin Improvement Proposal was the result of months of negotiation among major players and activatedSegregated Witness, something that will help bitcoin core scale going forward.

Right now, bitcoin cash is actually worth quite a bit on paper at least. Some are trading it at around a value of $400 per coin, which makes it the fourth-largest cryptocurrency by market cap right now.

But heres the thing its currently really hard to sell bitcoin cash. While some exchanges have added the new currency for trading, liquidity is super low, which is why some say the price is being artificially inflated. Because most exchanges arent accepting deposits yet, the only bitcoin cash available to trade is currency that was credited by exchanges after the fork. Users holding bitcoin cash outside of exchanges, or in exchanges that dont support trading, are stuck waiting.

So the moral of the story is that theres probably a ton of bitcoin cash waiting to be sold, as soon as people can transfer it. Thats because theres not a whole lot of incentive to keep the coins, especially when people think it is overvalued and want to quickly cash out. And the price has already fallen take a look at the price moment today in USD. Its already down from a high of $680 to around $350 on Bitfinex, one exchange that is offering a market for the new currency.

Now this isnt to say its going to be worthless. Just look at Ethereum Classic, a hard fork of Ethereum. After that fork it dropped to about $1 per ETC, but a few months later is now worth around $15 per ETC. Of course, this price pales in comparison to the $220 that regular Ethereum currently trades at.

By the way, if youre wondering why exchanges arent accepting deposits of bitcoin cash, its because its nearly impossible to send bitcoin cash over the blockchain right now. This is because the newly forked blockchain hasnt yet adjusted its difficulty, which happens automatically every 2016 blocks. So its takingway too long to mine blocks and confirm transactions. For reference, one block today took 10 hours to mine, compared to the 10 minutes it should. Most exchanges require 6 or 7 block confirmations before they credit a deposit, so you can see how its basically impossible to move around bitcoin cash.

So whats next? The general consensus in the cryptocurrency community is that most people are just going to sell bitcoin cash as soon as they get the chance to which, if happens, will further drive down the price. But theres always a chance that people will flock to this coin and it actually retains or appreciates in value. Essentially, like everything else in crypto, no one knows whats about to happen next.

Read more:
WTF is bitcoin cash and is it worth anything? - TechCrunch